Trusted News for Credit Union Leaders
Credit Union Times
FEBRUARY 6, 2019 | VOL. 30 | NO. 4 | CUTIMES.COM
new war for deposits is creating a less than positive outlook this year among credit
union and bank executives.
Less than half of senior credit
union executives are optimistic
and only 50% of
bank executives
are of the same
mindset, according to research released in January
by Ron Shevlin, director of research
for consulting
firm Cornerstone
Advisors in Scottsdale, Ariz. The
research report was based on
300 interviews with senior credit
union and bank executives during the fourth quarter of last year.
Moreover, among credit union
senior executives, their optimism
has plunged by nearly 30% from
2018.
What is contributing to this
negative outlook, and what is also
alarming and worrisome among
financial institution executives, is
that the competition for deposits
has become increasingly fierce
and unrelenting. More than half
of credit union executives and
50% of bank executives said their
top concern for 2019 is to grow
deposits. Last year and in Y17
PETER STROZNIAK
pstrozniak@cutimes.com
The New
War for
Deposits
GROWTH STRATEGIES
PAYMENT SECURITY
redit unions offer
access to some of
the most sophisti-
cated ATMs in the
world, but like other financial
institutions, they are still bat-
tling a nagging problem: Skim-
ming. Among credit unions, it’s
the third most prominent type
of fraud, according to a recent
survey by CO-OP Financial Ser-
vices, and many don’t expect
those skimming attempts to let
up anytime soon. Here’s what
two industry pros said credit
unions can expect in 2019 and
what they can do now to help
stem the skimming.
What to Expect
1. More sophisticated skimmers.
The general recipe for skimming
devices still involves two main
ingredients: A mag-stripe reader
and a camera. But those ingre-
dients are getting
smaller, easier to
install and hard-
er to detect, said
Steve McCarthy,
general manager
at the Cincinnati,
Ohio-based Con-
vergint Technolo-
gies, which provides financial se-
curity services.
Criminals have concocted
so-called deep-insertion skimmers that communicate
TINA OREM
torem@cutimes.com
ATM Fraud: How to Fight Back
FOCUSREPORT:
CYBERSECURITY
When a credit union suffers a data
breach, it ends up paying more
than a dollar amount. In this Focus
Report, experts provide an analysis
of the true costs of a breach – both
monetary and reputational. Y6
Must Reads
INVESTMENTS
‘Pensionize’ 401(k)s and IRAs
In a world of defined contributions, American workers have
three challenges – inadequate
savings, leakage (or loans/early
withdrawals) tied to their retirement accounts and the need for
retirement income. Plus, just half
of all DC plans offer a way for
investors to transform balances
into periodic retirement income,
with only one in five offering
guaranteed lifetime payouts.
This situation prompted Steve
Vernon of the Stanford Center on Longevity, Wade Pfau of
The American College of Financial Services and researcher Joe
Tomlinson to explore and devise solutions to “pensionize”
retirement plans. Their work,
first published last year and then
updated this year, finds that only
one-third of workers contact financial advisors, and most lack
the necessary skills to convert
savings into retirement income
and typically have short planning horizons.
But research from the Stanford Center on Longevity (SCL)
and Society of Actuaries (SOA)
has found a “straightforward retirement strategy,” according to
the three authors. “Choosing a
specific solution that will help
workers generate retirement income requires them to make
informed tradeoffs between potentially competing goals,” they
explained, such as “maximizing
lifetime income; providing access to savings (liquidity); planning for bequests;
FINTECH
Insuring Cyber Risks
The top technology concern of
financial professionals is cyber-
security, according to polls don
by the Investment Adviser Asso-
ciation and Investment Advisor
agazine.
Addressing this issue are cyber
insurers, who work in a market
that could grow to $17.6 billion in
2023 from about $4.5 billion today, Orbis Research said. Driv
this growth are factors like data
breaches and the growing use of
cloud-based services.
To look at the risks facing
cyber insurers today and the
limitations of this coverage for
financial and other firms, r
porters spoke at length with Sid
Yenamandra, the co-founder
and CEO of cybersecurity firm
Entreda.
Yenamandra, who is well
versed in the potential causes
of a major cybersecurity-related
disruption, addressed he over-ll threat posed to the financial
industry by cyberattacks in an
earlier interview. In a third (and
inal) interview, he explains what
ctions financial firms are and
should be taking to imp ove their
cybersecurity.
What level of cyber risks do
large insurance companies
have?
Yenamandra: This is a question
hat goes to the core of what we
do as an organization. At Entrada,
we work with independent bro
k r-dealers and insurance firms
to help them manage Y15
Small CU
Inspiration
Hear Ironworkers
USA FCU’s
story. Y14
Security-Focused
Cultures
Create one at your
CU. Y8
Y16
McCarthy
Shevlin